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NLRB compensatory damage awards stand at crossroads after Fifth Circuit finds statutory authority lacking for such awards

11/7/25

By: Robert G. Chadwick, Jr.

On October 31, 2025, Judge Edith Jones wrote for the Fifth Circuit in Hiran Management, Inc. v. NLRB: “Ninety years after Congress created the National Labor Relations Board (“NLRB”) the NLRB claimed for the first time the ability to award full compensatory damages in its enforcement proceedings.” In the same paragraph, the Fifth Circuit denied this ability outright.

The “claim” referenced by Judge Jones was the 2022 NLRB decision in Thryv. Inc. For nine decades prior to Thryv, NLRB awards for unfair labor practices adhered to the language of the National Labor Relations Act (“NLRA”), which restricts monetary awards to equitable relief, such as “back pay.” See 29 U.S.C. § 160(c). In Thryv, however, the Board claimed the authority to award “make-whole relief,” which would include all “foreseeable pecuniary harms,” such as damages for credit card debt, withdrawals from retirement accounts, car loans, mortgage payments, childcare, immigration expenses, and medical expenses.

Predictably, Thryv sparked challenges to this newly asserted authority across several circuits. In 2024, the Third Circuit in NLRB v. Starbucks, rebuffed the NLRB’s expansion of remedies. However, earlier this year, the Ninth Circuit, in Intl. Union of Operating Engineers, Local 39 v. NLRB, approved the Thryv remedial scheme, thereby creating a split amongst the circuits. On October 20, 2025, the Ninth Circuit denied a petition for rehearing en banc of the earlier decision.

Not surprisingly, on October 31, 2025, the conservative Fifth Circuit in Hiran sided with the Third Circuit and held that “Thryv … exceeds the NLRB’s authority under the NLRA.” In rejecting the Ninth Circuit decision in Local 39, the Fifth Circuit stated: “…the Ninth Circuit glosses over the fact that the NLRB can only effectuate the purpose of the NLRA using authorized remedies.” The Fifth Circuit reasoned that the NLRA affords a complainant only equitable damages, such as back pay, and not legal damages, such as “make-whole relief.”

With Hiran deepening the split amongst the Circuits, and the NLRB being revamped by a new administration, the NLRB compensatory damage awards stand at a crossroads with many unanswered questions. Will the enforceability of such awards continue to depend upon geography? Will the U.S. Supreme Court be the final arbiter as to this issue? Will the new Trump General Counsel cease to seek compensatory damage awards before the NLRB? Will the new Trump NLRB overturn Thryv? Will other laws, such as the right to a jury trial enshrined in the Seventh Amendment, doom NLRB compensatory damage awards?      

Unfortunately, employers may not receive clear answers to these questions anytime soon. In the meantime, employers are encouraged to immediately seek legal counsel once an unfair labor practice charge is filed with the NLRB to assess the risk of an award of compensatory damages. With the current circuit split, the risks may wildly differ.

For more information, please contact Robert G. Chadwick Jr. at bob.chadwick@fmglaw.com or your local FMG attorney.             

Information conveyed herein should not be construed as legal advice or represent any specific or binding policy or procedure of any organization. Information provided is for educational purposes only. These materials are written in a general format and not intended to be advice applicable to any specific circumstance. Legal opinions may vary when based on subtle factual distinctions. All rights reserved. No part of this presentation may be reproduced, published or posted without the written permission of Freeman Mathis & Gary, LLP.